401(k) Savings Plan
VMware’s 401(k) Savings Plan helps you set aside money for the future to help you meet your retirement goals.
Start Saving as Soon as Possible
You are immediately eligible to enroll in the company-sponsored 401(k) program, managed by Fidelity Investments. New hires to VMware will be automatically enrolled in the plan at 6%, approximately 30 days after your hire date; Rehires must actively enroll to participate. You can either invest in a pretax 401(k), Roth 401(k) or on an after-tax basis. You may contribute amounts up to IRS and plan limits, as follows:
401(k) Savings Plan Details
|Pretax 401(k) Contributions||Roth Contributions||After-Tax Contributions||Employer Contributions|
|Are contributions taxed when made?||No||Yes||Yes||No|
|Are contributions taxed when distributed?||Yes||No1||No2||Yes|
|Are earnings taxed when distributed?||Yes||No1||Yes2||Yes|
|What are the IRS Annual limits?||$19,000 for 2019 for employee pretax and Roth contributions||$56,000 for 2019, including employee pretax, Roth, after-tax|
|What is the Catch-up contribution for age 50 and older?||An additional $6,000 for 2019|
|A catch‐up contribution may be made on a pretax or Roth basis and is in addition to both the pretax and Roth $19,000 Annual Limit, as well as the $56,000 Annual Additions limit, which applies to the total contributions made to your 401(k) across pretax, Roth, after‐tax|
1 A distribution from a Roth 401(k) is tax‐free and penalty‐free, provided the five‐year aging requirement has been satisfied and one of the following conditions is met: age 59½, disability, or death.
2 A partial distribution from a qualified plan must include a proportional share of the pretax and after‐tax amounts in the account. Therefore, while the portion of your distribution associated with your after‐tax contribution is not taxable, the portion of your distribution associated with any pretax contributions or earnings on pretax or after‐tax contributions is taxable.
You may also divide your contributions between the options (you will then have a separate source account for each type of contribution). Fidelity offers an interactive personal finance tool with specific tips and tools. Get your Personal Finance Picture today.
VMware provides a dollar-for-dollar match up to 6% of your eligible compensation. The quarterly maximum for the match is $2,250. You are immediately vested in your contribution as well as VMware’s matching contributions. In order to receive the Company match, you will need to defer pre-tax or via Roth 401(k) contributions. After-tax contributions are not eligible for Company matching.
You can contribute from 1% to 90% of your pay on a pretax basis up to IRS limits. Contribution limits for 2018 are as follows:
- Regular contributions: The maximum contribution is $19,000 (applies to your pretax and Roth 401(k) contributions combined).
- Catch-up contributions: If you are age 50 or older, or will reach age 50 by the end of the calendar year, you can make an additional catch-up contribution of $6,000. (Applies to your pretax and Roth catch-up contributions combined.)
- After-tax contributions: You may make additional after-tax contributions up to $28,000.
- Roth in-plan conversion: Allows you to make after-tax contributions beyond the annual IRS 401(k) limit and then convert those contributions to an in-plan Roth account.
If you meet the individual contribution limit of $19,000 before the end of the calendar year, you will be eligible for an end of year true-up company-match contribution. A true-up match contribution ensures that if you have contributed the maximum early in the calendar year, you will receive the VMware match. The end of year true-up will occur following the end of the plan year (December 31st). You must be an active employee on the last day of the calendar year to be eligible to receive the true-up. For more information review the 401(k) 2019 Match Increase FAQ.
You can update your contributions at any time on the Fidelity website. Changes usually take 1-2 pay periods before showing up on your paycheck.
The 401(k) Savings Plan offers several choices of funds, ranging from money market accounts and bond funds to growth stock funds, including a brokerage option. You may allocate your contributions in any way you want among the available investment options and change them at any time. To manage your investments, log on to the Fidelity website.
Withdrawing and Borrowing Money from Your 401(k) Account
You may begin taking money from the plan any time after age 59½ or when you terminate employment. If you retire, you must begin receiving money from the plan no later than the 1st of April after the year in which you reach age 70½.
You may also be eligible to initiate a loan or hardship withdrawal on your account. For more information, call Fidelity Investments at 1-800-835-5095.
Naming a Beneficiary
When you enroll in the plan, you must name a beneficiary to receive your plan account balance in the event of your death. You can update your beneficiary at any time on the Fidelity website.
For more information on VMware’s 401(k) Savings Plan, please refer to the Summary Plan Description (SPD).
ASK HR [VMware network access required]
Phone: 1-888-VMWARE8, option ‘US Benefits’
Internal Phone: ext. 29200